Radio evolution - ICS - Universidade do Minho

Pierre BélangerFor both traditional and digital media, one of the key vectors of growth is linked to advertising activities.Predictably, the global recession of 2009 significantly impacted the revenues that traditional media generatedfrom advertising dragging the 2009 numbers to pre-2006 level with a return to the 2008 echelon not expectedbefore 2014 (PwC, 2011). For the 2006-2010 period, PwC estimates that the compounded results for non-digitaladvertising spending in Canada came in at -0.7%. Conversely, digital media continued their growth during thesame period with an estimated CAGR of 26.7%. As PwC comments in its 2011-2015 outlook, digital media's forteresides in the advertiser's ability to appear where the right people are, especially when they can provideinteraction with the target audience in a personalized way.“Advertising agencies are responding …. by providing their clients with new ideas for connecting withconsumers via digital platforms, thus enhancing ad effectiveness and RoI (return on investment). Agencies are alsoinvesting in the success of digital advertising by sharing the risks and rewards with brand owners, andexperimenting jointly with new ideas. At the same time, advertisers are increasingly demanding transparent,verifiable evidence that they are hitting the right segments with the right messaging via the right platform, arequirement that is seeing audience measurement move away from volume toward engagement. (PwC, 2011b:2)The strength of the gradual transition from traditional media advertising toward digital media isunquestionably gaining traction: while spending on digital media represented 9% of total budgets in 2006, it hasclimbed to 21% in 2010. PwC forecasts that advertising on digital venues should represent a third (33%) of allCanadian advertising spending by 2015. For any traditional broadcaster, the 2.5% compound annual growth ratefor the period 2011-2015 envisaged by PwC pales when compared to the 15.5% pace at which digital advertisingis expected to progress (see figure 2). In this sense, the writing has already been on the wall from some time nowand Astral Radio's digital strategy is but an adaptive reflex to an otherwise rapidly evolving media eco-system inwhich it still occupies a leading position.Redesigning Astral's Digital PersonaAlthough by some standards Astral Radio's decision to establish a marked presence in the digital spherecould have come sooner, its earlier efforts, albeit timid, were far from delivering the sort of unambiguous signalsthat one would expect. While the Canadian radio industry's yardstick set a range of between 3 to 5% for theportion of advertising revenues attributable to digital properties, Astral Radio's performance was a paltry 1.5%, anumber that understandably did very little to convince the administration of the merits of a massive investment indigital ventures. The counter argument of course was that it was precisely because of a lack of a clear, aggressiveand efficiently executed strategy that Astral Radio was missing out on the irreversible digital transition. Thedecision was thus made to extend what was an indisputable dominant radio footprint into the high growth digitalmedia space.By acquiring Standard Broadcasting Corporation's radio assets Astral Radio was inheriting its collection ofantiquated Content Management Systems (CMS) that only added complexity to what Astral was already using.Dealing with a variety of CMS's within the same company is a costly, time-consuming, resources-heavyinfrastructure that considerably hinders one's ability to innovate and be nimble.Soon after the hiring of a Chief Digital Strategies Officer in the summer of 2009, Astral elected tostreamline its web activities and migrate its three main CMS's and related sub-systems into a common web CMS.That decision was motivated both by the urgency to bolster many of the group's then stale-looking webproperties and by the need to revitalize the entire collection of websites so that they could be a contributingfactor in the digital sales strategy that was being developed. The objective was clear: build a dynamic businessmodel capable of expanding, responding and adapting to the changing online landscape while increasing revenuethrough multiple sources. By proceeding with a massive overhaul of its web operations, Astral Radio was counting84 | ECREA: Radio Evolution: technology, content, audiences – conference 2011